Principal Financial Insurance is 140 years young, offering innovation, very competitive rates and a nice selection of products; it’s a company to be considered.
The Principal Financial Group, referred to as ‘the Principal,’ grew out a desire to help individuals, families and small businesses meet their financial goals. One area of activity is within the life insurance space, where it offers term insurance policies, as well as several forms of permanent (whole) life insurance. We will be reviewing its permanent policies. The company has received many accolades for its ethics, customer focus and excellence as a place of employment, all boding well for how customers can expect to be treated. The company has the requisite financial strength to be there when your beneficiaries need it, which must be a central consideration when selecting a whole life insurance provider.
|Varies based on age and other factors|
Ease of enrollment
Ways you can enroll
|Online form or phone|
What types of insurance?
|Universal, variable, indexed and guaranteed universal life policies|
How soon is the policy in effect?
|Faster than most due to accelerated underwriting, averaging 8 days|
Ease of access
|Online form, or phone Mon-Fri 7:00 AM-7:00 PM CST|
What is the maximum coverage available?
|Varies for each policy type|
What isn’t covered?
|Suicide exclusion not specified|
A.M. Best’s Financial Strength Rate (FSR)
Medical exam required
Is a medical exam required?
|Technically yes, but waived for 50-60% of those who qualify|
The Principal communicates through a clean, intuitive website that gives you tools to go as deep as you like to find answers to whatever you need. As you age, this clarity becomes more and more valuable. Yet you are also given the choice of other means of communication, depending on what works best for you. Despite being a very large corporation, the company gives the impression of easy accessibility. In fact, for the past four years, it has ranked ‘among the best’ in company-client interaction in a survey done by J.D. Power Ratings of Life Insurance Customer Satisfaction. One small downside is that the company uses ‘nearest age’ in its evaluations. For example, at 69 1/2 plus one day, you would be considered already 70. You could unknowingly ‘age out’ of an opportunity if you are approaching a maximum age for issue.
If you qualify, you may be part of the 50-60 percent of applicants who benefit from not having to take exams or lab tests during underwriting, part of the Principal’s Accelerated Underwriting. The company is not particularly strict on its underwriting guidelines; it is perceived as fair. Of course, once you have a policy, your declining health will have no impact on any rating or premiums going forward, unless you allow your policy to lapse and must start a new application process. As your health declines, if you need to access some of the funds accumulated in your permanent life insurance policy, you can withdraw or borrow against it. Most policies have the Chronic Illness Death Benefit Advance rider as well, to help with medical and other costs. Anything taken out, however, will be deducted from the value eventually paid to your beneficiaries.
The Principal Financial Group is a leading financial services organization that offers life insurances among its many products. Its permanent life insurance selection is broad, with unusual products such as ‘second-to-die’ Survivor Universal Life which covers two lives, with a death benefit payable upon the death of the second life. The Principal’s prices are not rock-bottom, but they are indeed competitive. Between its solid financial strength which ensures the company will be there when you need it and its customer-centric attitude, the Principal is a company to consider if you decide permanent life insurance has a role to play in your financial planning.
Frequently Asked Questions:
Does your whole life coverage include some kind of ‘accelerated death benefit?’ Yes, accelerated benefits are available on UL Protector IV and VUL Income III policies. Also, both Terminal Illness Death Benefit Advance and Chronic Illness Death Benefit Advance are available on UL Provider Edge, UL Flex III, UL Accumulation II, IUL Flex II and IUL Accumulation (see policy descriptions below).
When does my coverage begin? Coverage begins only when the company approves your application for insurance and the premium is paid which, with the Principal’s Accelerated Underwriting, averages just eight days.
What one thing sets this insurer apart from others? The Principal applies unique automated accelerated underwriting on its permanent life insurance coverage, giving you a faster decision than most. Also, it offers a ‘second-to-die’ program called the Survivorship Program that allows two people to have coverage at a lesser cost.
Overview: The Principal offers four major types of permanent life insurance. The universal and variable universal options both allow you to get a fixed death benefit, with flexible premiums, but the cash accumulation portion is invested differently in each case. (With a variable product, you have the potential for more significant growth by utilizing stock, bonds or mutual funds, but at the cost of higher risk.) Indexed universaland guaranteed universal policies offer other features that could be attractive.
Universal Life Insurance – These policies accumulate cash value at a floating interest rate, with a minimum rate guarantee. They offer flexible death benefits and flexible premiums. They all provide the Chronic Illness Death Benefit Advance rider, and you benefit from Healthy Lifestyle Credits.
Universal Life Provider Edge – A low-cost permanent plan for coverage to age 90 and greater, issue age to 85, minimum face amount of $50,000, but offers amounts of $1 million and greater. Good for estate planning, survivor income and exit planning.
Variable Universal Life Insurance – Accumulation-focused products designed to provide death benefit protection and supplemental income. The risk is higher, but you have more control over the allocation of your premium dollars. It provides flexibility with a more aggressive cash value accumulation strategy and gives you options to access tax-deferred cash values without penalty.
Indexed Universal Life – for those interested in the potential for higher interest earnings than traditional universal life insurance offers. Both types are available for issue to age 85.
Guaranteed Universal Life – Both offer Death Benefit Guarantee, but no Chronic Illness Death Benefit Advance rider. Can be used in estate planning to leverage certain tax deductions.
Optional Accessories or Add-on Services: The Principal’s available add-ons, or riders, to some permanent life policies include Chronic Illness and Terminal Illness Death Benefit Advance, Cost of Living Increase, Life Paid-Up and Waiver of Monthly Policy Charge.
Contract Details: View individual policies for details.
Accreditations: The Principal Financial Group has been accredited by the Better Business Bureau since 1948 and holds a rating of A+ on BBB’s website. It carries A.M. Best’s high rating of A+ for financial strength and has a Comdex ranking of 91 out of 100 (average rating from the four major rating agencies). It enjoys many kudos, such as being named one of the World’s 100 Most Ethical Companies per Ethisphere Institute for six years running, and one of America’s Best Employers by Forbes in 2016.
Company Details: The Principal began as Bankers Life Association in 1879 when founded by Edward Temple and five others to offer life insurance in the form of memberships to its initial clients: healthy men aged 22-55 who worked in low-risk occupations. Since then, it has changed its name (to Principal Financial Group in 1985), gone global, and gone public on the NYSE in 2001. By 2016, it ranked 236th on the Fortune 500 list of companies by revenue. By 2017, premiums and fees from individual life insurance alone reached nearly $1.1 billion.
As CEO Dan Houston says, “Simply put, your goals are at the heart of what we do. It’s what motivated Edward Temple to start our company in 1879. It’s what continues to drive us today. We believe everyone can make progress with the right partner.” The Principal’s life insurance policies are issued by Principal National Life Insurance Company and the Principal Life Insurance Company. Securities are offered through Principal Securities, Inc.
Principal Financial Group
711 High Street
Des Moines, IA 50392